Why should you beware? Because it appears what they are recommending is that you be alot more open with your data. That is certainly the case with me. For my settings, I restrict my settings to “Only Friends” for most people. For my photos, I restrict that mainly to close friends and family. However, what Facebook advised is essentially making most of that open to others beyond that. So, if your old settings were locked down like mine are, pick “Old Settings”.
Facebook is making this look like they are offering more Privacy, but what they really want (need?) you to do is open up for their own benefit. I think you should pick what works best for you.
I also didn’t like that I needed to have to move my mouse over an Old Settings radio button before I could see my old settings. They could have made it alot more obvious. I suspect most people will have a hard time with the panel and pick settings that don’t work for them.
That’s just me. You need to decide for yourself what your privacy settings should be. I just don’t see Facebook being all that helpful in that regard.